SolarCity, is one of the leading providers of residential solar systems in the Bay Area. The company was founded in 2006 by brothers Lyndon and Peter Rive.
Currently they have completed and are working on more than 10,000 solar projects and are expanding to the East Coast. The company has grown to more than 1,000 employees, even though progress was stalled during the recession it still managed to raise more than $700 million in project financing. Now SolarCity has plans to expand and perhaps go public.
Even though SolarCity has been doing very well, expansion in the green sector does not always go smoothly. “Usually young companies need to stick to their knitting, their core business,” said Michael T. Eckhart, cofounder of the American Council on Renewable Energy. Judging from the Rive’s family history risk is not something the brothers fear. “We came from a very entrepreneurial family,” said Peter Rive, SolarCity’s chief operations officer. In the late 90’s Lyndon Rive went to San Jose, California to complete a world championship for underwater hockey. He liked California so much he decided to start a business with his other brother Russell. That firm, Everdream, set up computers for companies with remote offices. Peter Rive soon joined them as chief technology officer. But Lyndon and Peter believed they could do something bigger. The two brothers teamed up to do solar after realizing there was a big demand for new technology on the market, but not enough customer service. More importantly solar systems were very high priced to buy and install. SolarCity had a different model-leasing.
Which means homeowners would pay no upfront costs for installation of the solar system. Instead they would pay a monthly leasing charge based on the size of the system. The company would retain ownership of the equipment. Overall, new SolarCity customers save an average of 10% to 15% over what homeowners on the traditional grid pay. And the savings increase overtime. Although, not all homeowners qualify for a system. SolarCity sends inspectors to evaluate the roof conditions, access to sunlight and other factors. They have also tackled commercial systems, In 2008 they worked with Ebay Inc, they installed a 60,000-square foot, 650-kilowatt system.”Ebay would have been one of many large systems for other companies, but a marquee account for us” All of our resources went to it.”
SolarCity has also installed systems for Wal-mart stores Inc. and Intel Corp., and for three military services -the Air Force, Navy and Marines. They have faced many challenges during the recession. The brothers were forced to reduce their staff, and they spent the first six months of 2009 running on cash until financiers tiptoed back into the solar market. To stay flexible, SolarCity experimented with funding arrangements. PG&E Corp invested $60 million to help SolarCity install panels. Even though other solar companies have struggled to go public, the Rive brothers keep it as an option.
They want to grow, but the fact that SolarCity is a young firm works to their advantage, Lyndon said. It’s still basically a family-run operation without a lot of bureaucracy , but the company has matured enough to attract significant funding. Los Angeles Times